The board of Spain’s NH Hotel Group has recommended rejecting a bid price for shares by Thai hotel chain Minor International, although it is unlikely to affect the takeover of the group.

Only the board members representing another shareholder, the Hesperia hotel group, were said to be in favour of accepting the offer.

But that alone would be insufficient to pass the 50 per cent threshold Minor is seeking in NH, a company spokesman told TTG Asia.

Details of a report on the operation received from the Bank of America Merrill Lynch backed their views, the board told the Madrid Stock Exchange, the Comisión Nacional del Mercado de Valores (CNMV).

The Minor bid, made through MHG Continental Holding, values NH at some 2.5 billion euros (US$2.8 billion), a premium of just under 0.8 per cent on the stock market closing price on May 22.

But the report described the amount offered as “inadequate”, upholding the position taken by the board in June, NH told the CNMV.

“The board considers the offer price does not sufficiently meet the value of the shares, which is why it is against the offer.”

NH said they were expecting improved financial results with EBITDA earnings forecast to reach 260 million euros in 2018 and to 285 million euros in 2019, thanks to a surge for urban hotels in Europe, in its main market sector.

Its assets had also increased in value to some 2.1 billion euros, 15 per cent more than the valuation made in 2016, with a further rise to over 2.2 billion euros expected in 2019.

However Hesperia, which holds an eight per cent stake through Grupo Inversor Hesperia (Gihsa), said it will be accepting the Minor bid before it closes on October 22.

Minor, which has so far picked up 46 per cent of NH shares, mainly through acquiring the former majority holding of China’s HNA group, has said it is looking for a controlling stake but wants to maintain the Spanish group as an independent unit.

“Whether the shareholders follow the board’s offer will depend on them,” said the NH spokesman. “They are all small holdings, but practically the deal has been achieved.”

Meanwhile, NH is due to drop out of the medium company stock index, the Ibex Medium Cap, from October 23, the index’s technical advisory committee announced on October 9.

“The decision is based on the special circumstances that are happening in the (shares’) value,” the committee said.